Source Estonian Government
The law amending the VAT Act was published in the Riigi Teataja. The Act transposes the amendments to the EU VAT Directive, harmonizing the treatment of on-demand and chain transactions at EU level. The harmonization of the VAT treatment of these transactions at EU level is necessary for the sake of legal clarity. The legislative changes will reduce the administrative burden on traders in intra-Community trade. More information on the law and procedural information can be found here
Text of the law (unofficial translation) (Link)
Law amending the Value Added Tax Act
Accepted 04.12.2019
§ 1. Amendment of Value Added Tax Act
The following amendments are made to the VAT Act:
1) in clause 1 (1) 4), the word “taxable person” is replaced by the words “taxable person (hereinafter taxable person )”;
2) subsection (3 1 ) is added to § 2 worded as follows:
“(3 1 ) Demand backup purposes of this Act are goods, which are transported to another Member State, taking into account all of the following conditions:
1) The goods are delivered by a taxable person of another Member State in order to dispose of the goods there within 12 months of receipt in another Member State, a taxable person registered pursuant to between taxable the agreement reached;
(2) the person to whom the goods are transported is identified for tax purposes in the Member State of destination and that person and the tax identification number issued to him in that Member State are known to the taxable person transporting the goods;
3) the taxable person transporting the goods to another Member State does not have a place of business or a permanent establishment in the other Member State to which the goods are supplied;
4) the taxable person keeps records of goods delivered to another Member State pursuant to the procedure established on the basis of subsection 36 (5) of this Act;
(5) the taxable person states the details of the acquirer of goods transported to another Member State in his intra-Community turnover report. ‘;
3) subsection 2 (10) is amended and worded as follows:
“(10) For the purposes of this Act,” investment gold “means gold bars or bars of gold of an accepted weight on the gold markets of at least 995 thousand parts by weight and gold coins minted after 1800 and denominated in legal tender and containing at least 900 thousand by weight and whose selling price does not exceed by more than 80 per cent the free market price of the gold contained in the coin. ‘;
4) in the first sentence of subsection 3 (1 ), the words “Taxable person (hereinafter taxable person )” are replaced by “Taxable person”;
5) clause 7) is added to subsection 7 (1) worded as follows:
“(4) transfer of goods shipped from Estonia to another Member State as demand stocks.”;
6) clauses 12-14 are added to subsection 7 (2) worded as follows:
“(12) the transport of demand stocks from Estonia to another Member State;
13) the delivery of the demand reserve from Estonia to another Member State if it was not transferred within 12 months after the arrival of the demand reserve in another Member State and if it has been returned to Estonia within the said period;
14) the transport of an on-demand stock from Estonia to another Member State if its purchaser is replaced by another taxable person within 12 months of the arrival of the on-demand stock in another Member State. “;
7) subsection (3 1 ) is added to § 7 worded as follows:
‘(3 1 ) Except when demand stocks are shipped from Estonia to another Member State within 12 months from the date of arrival of the goods in another Member State, intra-Community turnover shall be deemed to have been effected on the day following the 3 in the cases specified. “;
8) clause 14) is added to subsection 8 (3) worded as follows:
“14) delivery of demand stocks to Estonia.”;
9) subsections (6) and (7) are added to § 8 worded as follows:
‘(6) Intra-Community acquisition of goods is also purchases of goods delivered to Estonia on demand.
(7) If demand stocks delivered to Estonia are not disposed of within 12 months of the arrival of the goods in Estonia, such goods shall be deemed to have been acquired in the Community on the day following the expiration of 12 months, unless the goods have been returned to was sent. “;
10) subsections (4) and (5) are added to § 9 worded as follows:
‘(4) Where the same goods are disposed of several times and directly delivered by a taxable dealer from one Member State to another to the last acquirer of the chain of transactions, the supply of goods to such a reseller shall be deemed to be intra-Community supply. Such a reseller shall carry out intra-Community acquisitions of goods in the Member State of delivery. This provision does not apply in the case specified in subsection (5) of this section.
(5) Where a trader participating in a supply chain who transfers goods from one Member State to another to the last acquirer in a chain of transactions has communicated his tax identification number in the Member State of dispatch, the intra-Community supply of goods shall be treated as such. From that dealer, the purchaser of the goods shall carry out intra-Community acquisitions in the Member State to which the goods are delivered. ‘;
11) in subsection 11 (2), the words “§§ 7 (3) and 8 (4)” are replaced by “§ 7 (3) and (3 1) and § 8 (4) and (7)”;
12) clause 15 (3) 2) is amended and worded as follows:
“(2) goods the supply of which and the transport of them to another Member State, whether or not effected in another Member State, shall be treated as intra-Community goods;”;
13) subsection (3 1 ) is added to § 15 worded as follows:
‘(3 1 ) Subsection (3) 2 ) of this section does not apply if, pursuant to § 16 of this Act, the supply of such goods is exempt or missing, except as the the registration number or the turnover of such goods is not entered in the intra-Community turnover report in accordance with § 28 of this Act. ‘;
14) clause 28 (1) 1) is amended and worded as follows:
“(1) it has intra-Community trade in goods during the tax period, has disposed of the goods as a dealer in a triangular transaction during the tax period, or has shipped a demand stock from Estonia to another Member State, including
15) clause 6) is added to subsection 36 (1) worded as follows:
“6) keep records of transactions and operations related to stocks, taking into account the provisions of clauses 7 (1) 4) and 2) 12) -14) and subsections 8 (6) and (7) of this Act.”;
16) subsection 36 (5) is amended and worded as follows:
“(5) The procedure for the daily recording of value added tax by a taxable person shall be established by a regulation of the minister responsible for the field.”;
17) in the enacting terms of the Act, the text “2017/2455 (OJ L 348, 29.12.2017, pp. 7-22)” is replaced by “2018/1910 (OJ L 311, 07.12.2018, pp. 3-7)”.
§ 2. Entry into force of Act
This Act enters into force on 1 January 2020.
